Fresenius AG: Excellent financial results in the 1st-3rd quarter of 2005; full-year outlook confirmed

• Sales: € 5.7 billion, + 7 % in constant currency, + 6 % at actual rates
• EBIT: € 703 million, + 13 % in constant currency, + 12 % at actual rates
• Net income: € 161 million, + 30 % in constant currency, + 29 % at actual rates
• Fresenius Medical Care continues strong sales and earnings growth
• Fresenius Kabi achieves excellent operating income and strong organic growth
• Fresenius ProServe increases order intake by 20 %

Compared to the preliminary figures announced on October 14, 2005, EBIT improved by € 1 million to € 703 million and net income by € 2 million to € 161 million.

2005 Group outlook confirmed
Fresenius confirms its increased earnings guidance as announced in the preliminary nine-month results release on October 14, 2005 as well as its sales expectation for the full-year 2005 (before the announced acquisitions).

Sales – high organic growth
In the first nine months of 2005, Group sales increased 7 % in constant currency. Organic growth contributed 6 % and acquisitions 2 % to this increase. Currency translation had a -1 % and divestments a -1 % effect on sales. Sales were € 5,712 million, an increase of 6 % at actual rates (Q1-3 2004: € 5,399 million).

Remarkable constant-currency sales growth was achieved in the main markets North America and Europe of 7 % each. Strong growth rates were achieved in Latin America (+20 %) and in Africa (+29 %). In Asia-Pacific, Fresenius Kabi achieved excellent sales growth. The lower project volume at Fresenius ProServe impacted the sales development in this region.



Sales contribution of the three business segments:



Excellent earnings growth
EBITDA increased 11 % in constant currency and 9 % at actual rates to € 937 million (Q1-3 2004: € 857 million). Group EBIT rose 13 % in constant currency and 12 % at actual rates to € 703 million (Q1-3 2004: € 628 million). The Group EBIT margin further improved to 12.3 % in the first nine months of 2005 (Q1-3 2004: 11.6 %).

Group net interest was € -146 million in the first nine months of 2005 (Q1-3 2004: € -156 million). This improvement was mainly the result of a lower debt level compared to the first nine months of 2004 in combination with lower interest rates. The tax rate for the first nine months of 2005 was 39.3% (Q1-3 2004: 40.3 %), in line with the full-year expectation.

Minority interest increased to € 177 million (Q1-3 2004: € 157 million). 96 % was attributable to minority interest of Fresenius Medical Care. Group net income grew strongly by 30 % in constant currency and by 29 % at actual rates to € 161 million (Q1-3 2004: € 125 million). Excellent operating results of the two largest business segments Fresenius Medical Care and Fresenius Kabi, lower interest expenses and a lower tax rate contributed to this increase.

Earnings per ordinary share were € 3.92 (Q1-3 2004: € 3.04). Earnings per preference share were € 3.94 (Q1-3 2004: € 3.06). EPS increased 29 % for both share classes.

Investments considerably increased
In the first nine months of 2005, Group investments increased considerably to € 460 million (Q1-3 2004: € 253 million). € 196 million was spent for property, plant and equipment and intangible assets (Q1-3 2004: € 174 million) and € 264 million for acquisitions (Q1-3 2004: € 79 million). The increase in acquisition spending was mainly driven by Fresenius Kabi.

Solid cash flow performance
Fresenius achieved a very good operating cash flow of € 592 million in the first nine month of 2005 (Q1-3 2004: € 580 million). This positive performance was driven by improved earnings whereas higher income tax payments of Fresenius Medical Care in North America had a negative effect. Free cash flow before acquisitions and dividends was € 412 million (Q1-3 2004: € 423 million). Free cash flow after acquisitions (€ 213 million) and dividends (€ 132 million) was € 67 million (Q1-3 2004: € 232 million). This figure was driven by significantly higher acquisition- spending and higher dividend payments.

Solid balance sheet structure
Total assets increased 12% to € 9,196 million (December 31, 2004: € 8,188 million). In constant currency, total assets grew 5 %. Current assets increased 15 % to € 3,163 million (December 31, 2004: € 2,755 million). In constant currency, current assets grew 9 %. This increase was driven by acquisitions and growth of operations.

Group debt rose 3 % to € 2,821 million as of September 30, 2005 (December 31, 2004: € 2,735 million). In constant currency, debt was 1 % below previous year-end's figure. The net debt/EBITDA ratio was 2.1 as of September 30, 2005 (December 31, 2004: 2.2).

Shareholders' equity including minority interest rose 17 % to € 3,932 million compared to € 3,347 million on December 31, 2004 (at constant currency: +6 %). The equity ratio including minority interest improved to 42.8 % due to strong increase in earnings and currency translation effects (December 31, 2004: 40.9 %).

Employee numbers continue to grow
As of September 30, 2005, the Group had 72,484 employees worldwide, an increase of 6 % (December 31, 2004: 68,494).

Fresenius Biotech
Fresenius Biotech develops innovative therapies with trifunctional antibodies for the treatment of cancer as well as cell therapies for the treatment of the immune system. In the field of polyclonal antibodies, Fresenius Biotech has successfully marketed ATG-Fresenius S for many years. ATG-Fresenius S is an immunosuppressive agent used to prevent and treat graft rejection following organ transplantation.

In the field of trifunctional antibody therapies, the current studies for ovarian cancer (Phase IIa), malignant ascites (Phase II/III) and malignant pleural effusion (Phase I) are continuing according to plan. Results of those studies will be presented for ovarian cancer in the first half of 2006 and for malignant ascites as well as malignant pleural effusion in the second half of 2006. Two phase II studies are in preparation to investigate the treatment of gastric cancer and breast cancer following positive results from two phase I studies for the treatment of peritoneal carcinomatosis and breast cancer. In addition, Fresenius Biotech acquired from its partner Trion the exclusive worldwide clinical development, registration, marketing and sales rights for the trifunctional antibody lymphomun. With this antibody Fresenius Biotech extends its range of indications from solid tumors to malignancies of the blood. The antibody is in preclinical development.

The Business Segments

Fresenius Medical Care
Fresenius Medical Care is the world's leading provider of products and services for patients with chronic kidney failure. As of September 30, 2005, Fresenius Medical Care was serving approximately 130,400 patients (+6 %) in 1,670 dialysis clinics (+5 %). The company delivered about 14.7 million treatments in the first nine months of 2005 (+5 %).

• Strong sales and earnings growth continued
• Excellent performance in North America and Europe
• 2005 outlook confirmed

In the first nine months of 2005, Fresenius Medical Care achieved sales growth of 9 % to US$ 4,999 million (Q1-3 2004: US$ 4,588 million). In constant currency, sales rose 8 %. Organic growth was 7 %.

In North America Fresenius Medical Care achieved a strong sales increase of 7 % to US$ 3,383 million (Q1-3 2004: US$ 3,149 million). Sales outside North America ("International") showed an even stronger growth of 12 % to US$ 1,616 million (Q1-3 2004: US$ 1,439 million). Sales in dialysis care increased 8 % to US$ 3,610 million (Q1-3 2004: US$ 3,334 million). In dialysis products, Fresenius Medical Care achieved sales growth of 11 % to US$ 1,389 million (Q1-3 2004: US$ 1,254 million).

EBIT rose 11 % to US$ 695 million (Q1-3 2004: US$ 625 million) and the EBIT margin was 13.9 % (Q1-3 2004: 13.6 %). EBIT includes one-time costs of US$ 8 million related to the transformation of Fresenius Medical Care's legal form into a KGaA. As previously announced, the company expects one-time costs for the full year 2005 to be approximately US$ 10 million for the transformation. Net income grew by 16 % to US$ 339 million in the first nine months of 2005.

For the year 2005, Fresenius Medical Care reconfirms its outlook. This guidance does not take into effect the impact of the Renal Care Group acquisition or the one-time costs for the full year 2005 in connection with the transformation of the company's legal form, nor the conversion of the preference shares into ordinary shares. For further information, please see Fresenius Medical Care's Investor News at www.fmc-ag.com.

Fresenius Kabi
Fresenius Kabi offers infusion therapies and clinical nutrition for seriously and chronically ill patients in the hospital and out-patient environments. The company is also a leading provider of transfusion technology products.

• New record EBIT margin of 14.3 % in the third quarter of 2005
• Excellent organic growth of 7 % in the first nine months of 2005
• 2005 outlook confirmed

In the first nine months of 2005, Fresenius Kabi's sales rose 12 % to € 1,239 million (Q1-3 2004: € 1,105 million). The company achieved an excellent organic growth of 7 %. Acquisitions, primarily the generic I.V. drug company Labesfal, contributed 5 % to sales. Currency translation added 1 % to sales growth. Divestments had a -1 % effect on sales.

Sales in Germany rose 2 %. Sales in Europe (excluding Germany) increased 14 %. Acquisitions contributed significantly to this growth. Fresenius Kabi continued to grow at double-digit rates outside of Europe: In Asia-Pacific Fresenius Kabi achieved strong growth of 15 %, in Latin America of 20 % and in Africa of 18 %.

EBIT of Fresenius Kabi significantly increased by 32 % in the first nine months to € 170 million (Q1-3 2004: € 129 million). The EBIT margin was 13.7 % (Q1-3 2004: 11.7 %). In Q3 2005, the EBIT margin improved by 50 basis points to 14.3 % compared to Q2 2005. Fresenius Kabi confirms its full-year 2005 outlook.

Fresenius ProServe
Fresenius ProServe offers services for the international health care sector including hospital management and hospital planning and construction as well as planning and construction of pharmaceutical and medical-technical production sites.

• Order intake increased by 20 % in the first nine months of 2005
• Strong 4th quarter in project business expected
• 2005 outlook confirmed

In the first nine months of 2005, Fresenius ProServe achieved sales of € 551 million (Q1-3 2004: € 581 million). On a comparable basis (excluding the nursing home business sold in 2004 and the discontinued international hospital management business), sales were at previous year's level. Sales growth of 2 % to € 260 million was achieved in the hospital management business (Wittgensteiner Kliniken). In the hospital engineering and services business (VAMED) sales rose by 1 % to € 236 million. In the pharmaceutical engineering and services business (Pharmaplan) the order intake improved and Pharmaplan's sales increased in the third quarter 2005.

EBIT was € 11 million in the first nine months of 2005 (Q1-3 2004: € 3 million; before one-time expenses: € 11 million) and in line with the company's expectations.

Order intake and order backlog developed very positively: Order intake in the first nine months of 2005 increased 20 % to € 239 million (Q1-3 2004: € 199 million). Order backlog as of September 30, 2005 rose 19 % to € 399 million (December 31, 2004: € 335 million). Fresenius ProServe expects a strong fourth quarter 2005 in its project business. Fresenius ProServe confirms its full-year outlook for 2005.

Live video webcast
As part of the earnings announcement for the first nine months of 2005, an analyst conference will be held at the Fresenius headquarters in Bad Homburg on November 3, 2005 at 1:30 p.m. CET (7.30 a.m. EST). All investors are cordially invited to follow the conference in a live broadcast over the Internet on this site at Investor Relations / Presentations. Following the meeting, a recording of the conference will be available as video-on-demand.